As you might expect, the recipe for CRM success is the flip side of the four-step recipe for failure. Successful CRM implementations typically:
* Develop customer-centric strategies (a five-dollar expression for figuring out how to add value to customers).
* Make organizational changes when required (redesigning workflow and information flow in order to implement new strategies usually requires stretching some functional boundaries and contracting others).
* Provide line-level training and support to those experiencing changed workflow and information flow (not just technology training, but providing a context and rationale for justifying change, often change in career-long work patterns).
* Set measurable goals (other than labor cost savings).
Simple. But much easier said than done. While knowing that these four factors alone exert a powerful influence on success rates is very reassuring to CRM implementers prepared to roll up their sleeves and take CRM seriously. However, this finding stands squarely in the way of several sizable CRM constituencies:
* Implementers wanting rapid deployment, quick ROI, "slam bam and we're done CRM." Unfortunately, it's the "messy" implementations that muck around with business strategies, people and organizational change that generate the returns.
* Software sellers wanting to sell their applications before customers discover what functionality they really need. Very un-CRM-like, but most software vendors treat CRM system sales as a one-time event.
* CRM consultants specializing in reengineering individual-level work processes and "selecting" (often selling) CRM software. Unfortunately, clients need much more support in the strategic areas—building strategies that add value to customers; redesigning department level workflow to carry out new strategies; re-architecting the technology infrastructure to accommodate new information needs; and dealing with the organizational and people consequences of the first three.
Overall, the "Blueprint" findings reflect a split between CRM implementer versus CRM vendor interests
Other principal findings continue this pattern of pleasing implementers more than vendors. To cite several examples:
* "Blueprint" data indicate that 25% of CRM implementers are bypassing commercial CRM software systems. Although we have no benchmark data for comparison, that percentage is almost certainly growing, shrinking CRM software sales potential.
* The decreasing reliance on CRM technology makes software sales an inaccurate barometer of industry growth. While using alternative tools such as information portals, data warehouses, and internally developed software offers new options and opportunities for some implementers, it takes away the only industry-growth measuring stick conveniently within analysts' reach.
* The data show no correlation between brand of CRM software and success rates. Successful implementers know their requirements before selecting and buy what's right for them—and advertising claims aside, no CRM software system is right for more than a slice of the user base.
* No other technology-related activity ranked as a driver of CRM success. While the majority of CRM implementations depend for success on effective and appropriate technology support, technology isn't the hard part. The business issues—strategy, organizational design, training, and measurement—are what make or break CRM implementations. Unfortunately, the vast majority of the CRM industry is focused on process and technology and not in alignment with implementer needs.
* CRM produces ROI primarily from two sources: reducing customer attrition and increasing customer penetration. New customer acquisition and front-office labor-savings are secondary contributors only. Unfortunately, database marketing consultants migrating in droves over to CRM focus almost exclusively on customer acquisition, and more than a few CRM software players cost-justify their wares with projected ROI from future staff-cuts.
* Develop customer-centric strategies (a five-dollar expression for figuring out how to add value to customers).
* Make organizational changes when required (redesigning workflow and information flow in order to implement new strategies usually requires stretching some functional boundaries and contracting others).
* Provide line-level training and support to those experiencing changed workflow and information flow (not just technology training, but providing a context and rationale for justifying change, often change in career-long work patterns).
* Set measurable goals (other than labor cost savings).
Simple. But much easier said than done. While knowing that these four factors alone exert a powerful influence on success rates is very reassuring to CRM implementers prepared to roll up their sleeves and take CRM seriously. However, this finding stands squarely in the way of several sizable CRM constituencies:
* Implementers wanting rapid deployment, quick ROI, "slam bam and we're done CRM." Unfortunately, it's the "messy" implementations that muck around with business strategies, people and organizational change that generate the returns.
* Software sellers wanting to sell their applications before customers discover what functionality they really need. Very un-CRM-like, but most software vendors treat CRM system sales as a one-time event.
* CRM consultants specializing in reengineering individual-level work processes and "selecting" (often selling) CRM software. Unfortunately, clients need much more support in the strategic areas—building strategies that add value to customers; redesigning department level workflow to carry out new strategies; re-architecting the technology infrastructure to accommodate new information needs; and dealing with the organizational and people consequences of the first three.
Overall, the "Blueprint" findings reflect a split between CRM implementer versus CRM vendor interests
Other principal findings continue this pattern of pleasing implementers more than vendors. To cite several examples:
* "Blueprint" data indicate that 25% of CRM implementers are bypassing commercial CRM software systems. Although we have no benchmark data for comparison, that percentage is almost certainly growing, shrinking CRM software sales potential.
* The decreasing reliance on CRM technology makes software sales an inaccurate barometer of industry growth. While using alternative tools such as information portals, data warehouses, and internally developed software offers new options and opportunities for some implementers, it takes away the only industry-growth measuring stick conveniently within analysts' reach.
* The data show no correlation between brand of CRM software and success rates. Successful implementers know their requirements before selecting and buy what's right for them—and advertising claims aside, no CRM software system is right for more than a slice of the user base.
* No other technology-related activity ranked as a driver of CRM success. While the majority of CRM implementations depend for success on effective and appropriate technology support, technology isn't the hard part. The business issues—strategy, organizational design, training, and measurement—are what make or break CRM implementations. Unfortunately, the vast majority of the CRM industry is focused on process and technology and not in alignment with implementer needs.
* CRM produces ROI primarily from two sources: reducing customer attrition and increasing customer penetration. New customer acquisition and front-office labor-savings are secondary contributors only. Unfortunately, database marketing consultants migrating in droves over to CRM focus almost exclusively on customer acquisition, and more than a few CRM software players cost-justify their wares with projected ROI from future staff-cuts.
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